Cap on cotton exports will bring down prices at home: Industry

New Delhi: The Indian apparel industry says the government's decision to cap cotton yarn exports at 72 crore kg in 2010-11 is likely to bring down prices in the domestic market, reports PTI.

"The cap is expected to bring some stability to high cotton yarn prices, thus increasing the availability of yarn for domestic apparel manufacturers and exporters," Apparel Export Promotion Council (AEPC) Chairman Premal Udani said in a statement.

According to industry experts, prices of cotton yarn have increased by about 85% over the last nine months.

The move has brought major relief to the apparel sector and will help create more jobs, the AEPC said.

Total cotton yarn production in 2010-11 is projected at 346 crore kg, whereas domestic demand is pegged at 265 crore kg.

Earlier, the government had fixed a ceiling of 55 lakh bales (weighing 170 kg each) on raw cotton exports in the current crop year to help domestic textiles companies, which were rapidly losing ground in international markets on account of the cascading effect of high prices of the natural fibre.

The cotton season runs from October to September.

The apparel exports industry has been strongly advocating the need to convert the raw material into value-added products within the country by disincentivising raw material exports.

Besides a quantitative cap on exports, the council has been seeking the imposition of export duty on cotton yarn.

The AEPC said that given the seasonal nature of demand from the industry, cotton yarn exports should be allowed in a calibrated and phased manner to ensure adequate supply in the domestic market throughout the year.

Apparel exports during the April-September period stood at just $5.02 billion, 7% less than in the corresponding period last year, on account of a slowdown in demand from Western markets like the US and Europe in the wake of the global economic crisis.

The apparel industry employs about seven million people in the country and almost half of them are engaged in export-oriented activities.


HDFC raises benchmark lending rate by 75 basis points

New Delhi: Leading housing finance firm Housing Development Finance Corporation (HDFC) today announced a hike in its benchmark lending rate by 75 basis points, making home loan dearer for both existing and new borrowers, reports PTI.

HDFC has raised its retail prime lending rate (RPLR) by 0.75% with effect from 1 December, 2010, it said in a statement.

With this revision the RPLR goes up from 14.25% to 15%.

“This is in line with the current rates of interest in the economy, which have hardened due to rising inflation and shrinking liquidity in the domestic market,” it said.

While HDFC has increased its benchmark by 75 basis points since its last hike in September, the overall interest rates in the economy have moved up as much as 125 basis points during this period, it said.

Faced with tight liquidity, many banks, including Punjab National Bank, Allahabad Bank and Syndicate Bank recently raised their deposit rates.

For new borrowers, it said, the home loans up to Rs30 lakh are priced at 9.5% while loans up to Rs75 lakh will cost 9.75%.

Earlier this week, HDFC also decided to discontinue the teaser rate scheme that entails cheaper home loans to new borrowers.

HDFC's scheme of dual rate home loan, which expired last month, was not extended.

Teaser rate is a special loan scheme under which a concessional rate is offered for a limited period to attract customers.

Under this offer, HDFC offered home loans at a fixed rate of 8.5% up to 31 March, 2011, 9.5% for a period between 1 April, 2011 and 31 March, 2012 and the applicable floating rate for the balance term.


No plans to reduce interest rate on farm loans: Thomas

New Delhi: The government today said it has no plans to reduce the rate of interest to 4% from the current 5% on farm loans, reports PTI.

In a response to a written query in Rajya Sabha, minister of state for food and agriculture KV Thomas said that the government has no proposal under consideration for reducing the interest rate to 4% on farm loans.

The minister said in 2009-10, the government provided an additional 1% interest subvention to those farmers who repaid their short term crop loan as per schedule.

“The government has raised this subvention for timely repayment of crop loans from 1% to 2% from the year 2010-11,” he said while adding that thus the effective rate of interest for such farmers will be 5% per annum.

The minister said that during the first half of current fiscal (April-September period) public sector commercial banks have disbursed total loan of Rs86,284 crore to farmers.

“The loan amount has benefited 77.68 lakh farmers for meeting their credit requirements for agricultural operation purposes,” the minister said.


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